Strategic Options with Foreign Witnesses in International Arbitration
May 23, 2012
QuickCounsel
By Mark W. Danis
This resource is sponsored by:
Overview
A defining feature of arbitration is the ability of parties to customize a dispute resolution process to their needs. The parties can choose
the arbitration institution, the arbitrators, the site and language of the hearing, the governing law, the number of arbitrators, and other
procedural aspects. And arbitrators, unconstrained by strict rules of civil procedure, may invite the parties’ suggestions on how to
focus discovery and streamline the hearing. For example, in one recent case handled by the author, the panel rejected the respondent’s
request for fact depositions, but adopted the claimant’s offer to make an employee and an expert witness available for multiple
off-the-record meetings to explain complex financial documents.
That need for flexibility and creative problem solving is particularly acute when it comes to witnesses in international arbitrations.
Common problems include the witness who is unable to travel to a distant hearing site; the witness willing to be deposed but who
lives in a jurisdiction prohibiting the same; or the witness whose key testimony may be “lost in translation” if presented solely
through live direct and cross-examination. Identifying these issues, and understanding the tools to address them, is critical at the outset
of an arbitration, when the parties and arbitrators are fixing ground rules that may be difficult to change at later stages.
This QuickCounsel summarizes two key tools (video conferencing and written witness statements) and one potential trap (foreign
legal restrictions on securing testimony) that are important to consider in any international arbitration.
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Video Conferencing For Witnesses Unable to Attend the Hearing
When a witness is unable or unwilling to travel to the site of an arbitration hearing, live video conferencing can be requested. The
growing use of Skype, FaceTime, and similar services has made arbitrators and counsel more comfortable with video conferencing as
an option in appropriate cases. Many arbitration facilities, such as those of the American Arbitration Association, are equipped with
video conferencing equipment (or if not, law firms or the client may have such resources), and there are third-party companies such
as CourtroomConnect that specialize in coordinating the conferences and technology.
There are strategic advantages and disadvantages in the use of video conferencing. For the party offering the witness, the impact of
testimony can be dulled, and for your opponent, the ability to effectively cross-examine the witness is compromised. But while not a
perfect substitute for live examination, video conferencing may be the best alternative available in certain circumstances.
Since the parties typically consent to a specific geographic site for the arbitration hearing, there certainly is no automatic right to use
video conferencing given the preference for witnesses to testify live. In deciding whether to allow a request for video conferencing,
arbitrators likely will weigh the unavailability of the witness, the prejudice to the cross-examining party, and the importance of the
testimony. Federal Rule of Civil Procedure Rule 43(a) provides one possible standard for a panel’s evaluation of the request. Rule 43(a)
provides that testimony in the form of “contemporaneous transmission” may be allowed “[f]or good cause in compelling
circumstances and with appropriate safeguards.”
The Advisory Committee notes to Rule 43 caution that
The importance of presenting live testimony in court cannot be forgotten. The very ceremony of trial and the presence of the
factfinder may exert a powerful force for truthtelling. The opportunity to judge the demeanor of a witness face-to-face is
accorded great value in our tradition. Transmission cannot be justified merely by showing that it is inconvenient for the witness
to attend the trial.
To demonstrate compelling cause for the use of video conferencing, it is advisable to secure a declaration from the witness describing
in detail why he or she is unable to testify live. A separate statement explaining the importance of the testimony also should be
prepared. Arbitrators may be particularly sympathetic in situations involving former employees whose current job responsibilities
preclude them from traveling to the hearing. By contrast, a current party employee who simply would prefer to not attend the hearing
because of the press of other business presents a less compelling candidate.
If video conferencing is allowed, various logistical issues will need to be considered and addressed, such as
- Whether either of the examining attorneys will be at the site of the witness;
- How the witness will be examined with documents; or
- Whether the foreign jurisdiction permits the taking of sworn testimony via video conferencing (see
below).
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Foreign Legal Restrictions on Securing Sworn Testimony Abroad
Even if video conferencing is desired, a threshold issue is whether the country in which the witness resides will allow an examination
under oath to be conducted for foreign legal proceedings. This may be governed by a complex set of international conventions and
treaties, such as the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters or the Vienna Convention on Consular
Relations.
For example, depositions are allowed in Japan, but only if they are taken at the U.S. embassy in Tokyo, or the consulate in Osaka, and
if detailed procedures are followed months in advance. That said, there does not seem to be any explicit authorization for permitting
testimony by video conferencing. In fact, the U.S. State Department indicates that “Japanese authorities have informed the United
States that Japan does not permit the taking of telephone or video-teleconference testimony.”
Taiwan, by contrast, allows testimony to be secured from a willing witness in the presence of a representative from the American
Institute in Taiwan who administers the oath. A non-exhaustive list of other jurisdictions in which testimony by video conferencing
may be allowed subject to local laws includes Australia, Germany, Hong Kong, Switzerland, South Korea, and the United Kingdom.
The U.S. State Department advises that, absent permission from the Chinese Central Authority, China does not allow American
attorneys to administer oaths or take depositions of willing witnesses, even before a U.S. consular officer. And we are aware of no
authority that would relax that prohibition as to testimony sought via video conferencing. One solution in such situations is to have
your witness testify from Hong Kong, which may be a short flight from their location in Mainland China and where no similar
prohibitions on obtaining testimony exist.
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The Use of Written Witness Statements
The Use of Written Witness Statements
When foreign witnesses are willing to attend the arbitration hearing live, care must be taken to select a strong interpreter to present
that witness’s testimony. See Navigating Cross-Border Litigation. Consideration also should be given as to whether to use a written
witness statement to present the direct examination portion of the witness’s testimony.
The rules of both the International Centre for Dispute Resolution (Article 20(5)) and the International Bar Association (Article 4(5))
allow arbitrators to order parties to use written witness statements, which usually are exchanged days or weeks in advance of the
hearing. The statements can take the form of a declaration, or be in a question and answer format, and are to set forth in sufficient
detail the pertinent facts known by the witness and the basis for those facts.
There are advantages and disadvantages to written witness statements. On the positive side, for witnesses who are not fluent in the
language of the arbitration, a written statement can allow a crisp presentation of the witness’s key points unencumbered by the
vagaries of translation. Witness statements also save hearing time (often the rationale provided for employing this procedure) and, in
limited respects, operate as a substitute for depositions.
From the perspective of the party offering a witness, there are at least two disadvantages to the use of witness statements. First,
written witness statements lack the impact and immediacy of live testimony, and thus are not the best means by which to persuade a
panel. Some arbitrators remark that they discount witness statements as being the product of attorney drafting, and that they prefer to
judge the substance and credibility of witness testimony through live examination.
Second, when a witness’s direct testimony is presented in a written statement, he or she will start their appearance at the arbitration
hearing under cross-examination by the opponent. This is an awkward way, to say the least, for a foreign witness to be introduced to
the arbitrators. The problem can be partially ameliorated by requesting that the tribunal allow witnesses to summarize their written
statements through a short, live direct examination before being tendered for cross-examination.
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Conclusion
In a typical state or federal court case, the path for most witnesses is predictable: the witness is identified and interviewed; prepared
for deposition and deposed; and prepared for trial and then testifies. If the witness is an expert, there is also the exchange of expert
reports. In an international arbitration, however, that sequence often is not followed. In its place, counsel have other options—video
conferencing; written witness statements; and informal expert/witness information exchanges. If requested at a sufficiently early
juncture, these tools can allow the flexibility to secure key evidence, keeping in mind that potential foreign legal restrictions may need
to be addressed or overcome to do so.
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Additional Resources
- Rules of Arbitration of the International Chamber of Commerce (International Chamber of Commerce 2012)
- Taking Voluntary Depositions of Willing Witnesses (U.S. State Department 2011)
- International Dispute Resolution Procedures (International Centre for Dispute Resolution 2010)
- Rules on the Taking of Evidence in International Arbitration (International Bar Association 2010)
- Protocol for the Use of Party-Appointed Expert Witnesses in International Arbitration (Chartered Institute of
Arbitrators 2007)
- M. Davies, Bypassing the Hague Evidence Convention: Private International Law Implications of the Use of Video
and Audio Conferencing Technology in Transnational Litigation, 55 Am. J. Comp. L. 205 (2007)
- ICDR Guidelines for Arbitrators Concerning Exchanges of Information (International Centre for Dispute
Resolution)
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Published on May 23, 2012
http://www.acc.com/legalresources/quickcounsel/sowfwiia.cfm